Biochemicals

by Debra Fiakas
Management of sustainable chemical developer BioAmber (BIOA: NYSE; BIOA: TSX) have not been feeling much love from the capital markets. The BioAmber team just wants some consideration for its proprietary platform for production of bio-based succinic acid. Historically succinic acid has been produced from fossil fuel and sold as an intermediate input for use in drug compounds, agriculture and food production. BioAmber has fine tuned a fermentation process to transform organic materials such as dextrose sugars into a bio-succinic acid.
BioAmber’s woes began last fall when the New York Stock Exchange sent the company a notice of non-compliance with NYSE...

It is earnings season and bio-catalyst developer Codexis (CDXS: Nasdaq) is expected to report fourth quarter and year-end 2017 financial results in the coming weeks. The three analysts who regularly publish estimates for the company expect a nickel profit in the quarter on $23 million in total sales of the company’s custom protein catalysts. Codexis is still perfecting its proprietary platform technology called CodeEvolver, but has already delivered an array of unique enzymes that help drive critical biological processes for its customers.
Codexis does not have a good track record in terms of meeting the consensus estimate. The company has only cleared the...

Novozymes (Copenhagen:NZYM-B; OTC:NVZMY) moved into yeast this week with a new organism, Innova Drive.
It’s saccharomyces cerevisae — the workhouse yeast that has been powering wine fermentation since the days of Noah and the Ark. But here’s a new strain engineered to cut fermentation times up to two hours, and yield boosts of up to two percent.
A 2% yield increase and a 5% faster rate of production — let’s illustrate it — would mean something like 7.1 million gallons per year of more ethanol from the same standard 100 million gallon nameplate plant. Retailing at up to $10 million dollars, per year (yes,...

by Bruce Comer, Ocean Park Advisors
More industry players chose to develop and build new capacity rather than buy plants
The North American biofuels industry experienced the fewest merger and acquisition transactions in recent history in 2017. There were only six M&A transactions, with a total estimated value of more than $100 million. They involved eight plants with 297 million gallons per year (MGPY) of production capacity. Half of these deals were for non-operating plants. A fourth deal was for a sub-scale demonstration plant. Contributing to the limited deal flow, two historically active acquirers, Green Plains and REG, did not close...

Biochemicals stocks are publicly traded companies whose business involves using plant or animal based feedstocks (biomass) to create new chemicals or substitutes of existing petrochemicals, plastics, or other fossil fuel derived substances other than fuels.
Amyris (AMRS)
BioAmber (BIOA)
Bion Environmental Technologies (BNET)
Codexis (CDXS)
Corbion (CRBN.AS; CSNVY)
Eastman Chemical Company (EMN)
Global Bioenergies (ALGBE: EURONEXT)
Novozymes (Copenhagen:NZYM-B; OTC:NVZMY)
Royal DSM (DSM.AS; KDSKF; RDSMY)
SECOS Group (SES.AX)
If you know of any biochemicals stock that is not listed here and should be, please let us know by leaving a comment. Also for stocks in the list that you think should be removed.

by Jim Lane
Last month, Amyris (AMRS) and Chevron (CVX) announced that Novvi and Chevron have entered into an agreement to jointly develop and bring to market novel renewable base oil technologies. Novvi is Amyris’ JV with Cosan (CZZ) to produce targeted hydrocarbon molecules from plant sugar for automotive, industrial, marine, and construction applications at unbeatable economics. Think lubricants for engines and machines.
Since launching its first commercial production in 2014, Novvi has been steadily increasing its base oil production to keep up with robust and growing demand for a variety of automotive, marine and industrial applications. Meanwhile, Chevron has one of...

In late August 2018, sustainable ingredients developer Amyris (AMRS: Nasdaq) staged a successful secondary offering by a selling stockholders, Foris Ventures and Vivo Capital Fund. In conjunction with the offering the company raised $46.0 million in new capital through the exercise of warrants held by existing shareholders. Last week the shares closed over 40% higher than the $6.25 deal price. The chief executive officer lauded shareholders for their support and apparent endorsement of the company’s game plan to commercialize sustainable alternatives to petroleum-sourced materials used in fragrance, health and beauty products.
Amyris leadership should celebrate its loyal shareholders given how far the company drifted...

Corbion Bids To Acquire TerraVia
In California, Corbion has made a $20M stalking horse stock and asset purchase bid for TerraVia (TRVA).
The purchase agreement provides TerraVia with a binding bid of $20 million in cash along with the assumption of certain liabilities, which is subject to higher or otherwise better offers. As part of the transaction, Corbion will be assuming the ongoing financial obligations of the business and its joint venture ownership, therefore the total financial commitment is expected to be in excess of the cash purchase price. Through this proposed transaction, TerraVia employees, who bring with them a wide...

By Jim Lane
Over the years we’ve all seen a lot of curveballs in the advanced bioeconomy. You see companies like Valero, which lobby the United States Congress with unbridled intensity to get rid of the Renewable Fuel Standard, on the verge of becoming the single-biggest producer of RINs in the United States (with news that they might take capacity at Diamond Green Diesel up to 540 million gallons).
You see companies like Solazyme which love the Renewable Fuel Standard and drive up to nearly a billion-dollar post-IPO valuation based on delivering fuels at volume, then announcing that there are even...

Earlier this week Bion Environmental Technologies (BNET) received approval of a patent for its proprietary ammonia recovery process. Bion’s technology converts livestock wastes into ammonium bicarbonate. Patent protection in the U.S. paves the way for Bion to deliver an environmentally friendly chemical to the market at attractive profit margins.
Ammonium bicarbonate is used for a variety of purposes from leavening to crop additives. It is the fertilizer market that has caught Bion’s attention. The company intends to ‘close the loop’ for the agricultural sector by helping livestock producers economically dispose of waste and then delivering a fertilizer for food crops that qualifies as organic.
It is an attractive...

Last month Eastman Chemical Company (EMN: NYSE) announced an expansion of its urethane extrusion line at one of its specialty chemical plants. This one located near Martinsville, Virginia makes paint protection films and window films. Urethane is perfect to protect surfaces in a home or business. It is not brittle like plastic, but has excellent tolerance for grease and oils. When exposed to the elements it does not rot or degrade over time like rubber.
Shareholders likely cheered the development in Virginia for potential addition to market share. Eastman grabbed $9.6 billion in sales from the specialty chemicals market in 2017, earning $1.4 billion in net income or...

by Debra Fiakas, CFA
In recent weeks management from Global Bioenergies (ALGBE: EURONEXT)made the rounds among New York City investors. The French specialty chemical developer is trying to win new friends in the U.S. for its bio-isobutene made through the fermentation of organic materials. Isobutene, also called isobutylene, is a four-molecule hydrocarbon that is a foundational chemical in a wide range of common products from gasoline additives to cosmetics. Until recently, isobutene was made exclusively in the crude oil refinement process. It is one of the many by-products of crude oil refining that helps pad the profit margins of big oil...

Specialty chemicals developer Gevo, Inc. (GEVO: Nasdaq) is celebrating a string of market wins for its renewable chemicals and fuels. Since its beginning thirteen years ago this month, Gevo has been doggedly perfecting its synthetic biology and chemical technologies and turning it into products that are in demand by consumers and industry. Last week shareholders were treated to an announcement by the U.S. Environmental Protection Agency (EPA) raising the amount of isobutanol for on-road use to 16% blend level from 12.5%. As a producer of renewable isobutanol Gevo will be a direct beneficiary of the EPA action. Following directly on the heels of that news,...

by Jim Lane
For several years now we have seen a significant number of players pivoting from biofuels towards smaller but higher-value markets in chemicals, nutrition, nutraceuticals, pharma, materials, flavorings, fragrances, cosmetics and more. We’ve reported on the proliferation of applications both in the Digest and in What’s Nuu? and indeed there’s been so much that’s Nuu, it’s been dizzying at times with all the spinning and twirling.
Capital costs and policy uncertainty have played their part, but the foot on the pedal for many has been oil prices. The scale of operations to compete with oil prices in the 2014-2017 period...

by Jim Lane
The Top Line. In California, Amyris (AMRS) reported Q2 GAAP revenue for the second quarter of 2018 of $24.8 million, compared with $25.7 million for the second quarter of 2017. Grants and collaborations revenue was $11.4 million for the second quarter of 2018 compared with $10.3 million for the year-ago period. The company noted that Q2 revenue was $24.8 million compared with the same period in 2017 of $21.7 million when adjusted for the low margin product sales on contracts assigned to DSM (DSM.AS). This reflects 15% growth on an absolute basis. GAAP net loss for the first half was $89.1...